M/S Bioneeds INDIA (P) LTD vs. The Commissioner Of Central Tax

Facts

M/s Bioneeds India (P) Ltd. (Petitioner) filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) on December 28, 2019, seeking waiver of service tax liability. The respondents, the Commissioner, Joint Commissioner, and Assistant Commissioner of Central Tax, Bangalore North-West GST Commissionerate, rejected the petitioner's application via a letter dated May 8, 2020. The rejection was based on the ground that the investigation against the petitioner was not completed as of June 30, 2019. The petitioner contended that they had admitted service tax liability during an investigation on January 12, 2018, which should be considered as quantification. Aggrieved by the rejection, the petitioner filed a writ petition before the High Court of Karnataka.

Held

The Court held that the admission of service tax liability by the petitioner during the investigation on January 12, 2018, clearly amounts to quantification prior to June 30, 2019, for the purpose of availing the benefit of the SVLDR Scheme. This finding was based on clause 10(g) of the Circular dated August 27, 2019, which clarifies that a duty liability admitted by a person during an enquiry, investigation, or audit is to be treated as 'quantified'. The Court also noted that Section 123 of the SVLDR Scheme is applicable even when an enquiry or investigation is pending on or before June 30, 2019. Therefore, the mere fact that the investigation had not been completed before June 30, 2019, could not be the sole basis for denying eligibility. The impugned order rejecting the petitioner's application was set aside, and the matter was remitted back to the respondents for reconsideration.

Key Issues

1. Whether the admission of service tax liability by the petitioner during an investigation on January 12, 2018, constitutes "quantification" for the purpose of eligibility under the SVLDR Scheme, specifically in light of clause 10(g) of the Circular dated August 27, 2019, and Section 123(c) of the SVLDR Scheme? Petitioner's contention: The petitioner argued that their admission of service tax liability on January 12, 2018, during the investigation, should be treated as quantification as per clause 10(g) of the SVLDR Scheme's circular. They relied on the circular which clarifies that a written communication intimating duty demand, duty liability admitted by the person during enquiry, investigation or audit, or an audit report, would be considered as quantification. They asserted that this admission predates the cut-off date of June 30, 2019. Revenue's contention: The revenue argued that the petition is without merit and liable to be dismissed. They did not present specific arguments regarding the interpretation of 'quantification' or the applicability of the circular and scheme beyond stating the petition lacked merit.